UBS announced cuts of 3,500 employees on Tuesday, mostly in its investment banking division, as the layoff trend continues in the banking industry.
UBS' announcement comes after Bank of America announced layoffs of 10,000 and HSBC announced layoffs of 30,000 during the month of August.
One of the reasons UBS and the other major banks are announcing major layoffs could be because of industry leader Goldman Sachs.
"The political atmosphere enabled them," said Ethan Cohen-Cole, assistant professor of finance of the Robert H. Smith School of Business at the University of Maryland-College Park. "Goldman (Sachs) triggered and enabled some others to make what would have otherwise been unpopular moves."
Goldman Sachs was one of the first major bank companies to announce its intentions to lay off United States employees this summer, while moving a portion of the jobs to Singapore. Shortly thereafter, UBS, Credit Suisse, Bank of America, and HSBC also announced layoffs.
"It shows you what is wrong with the whole process," Peter Cappelli, professor of management at the Wharton School of Business at the University of Pennsylvania, said. "Companies are putting too much emphasis on how they think the investing industry will read their actions versus what they actually need to do."
One thing that banking companies have done is move jobs from high cost areas, like New York City, to lower-cost areas, such as Salt Lake City, Utah, India and the Philippines. While moving jobs internationally isn't a new phenomenon, it does come at a time when government officials are desperate to lower the 9.1 percent unemployment rate.
One of the interesting aspects of the cuts is they were not made by only struggling companies. Instead, most are simply restructuring moves to maintain profitability in an industry affected by increased financial regulations. Some experts have speculated the Dodd-Frank Act of 2010, meant to place further financial regulations on banks, has caused some of the restructuring.
Cappelli and Cohen-Cole disagree on the extent of the impact, though companies in the past, such as MetLife, have indicated the increased regulations played into some of their banking operation decisions.
Regardless of the reasons, companies have decided to play follow the Goldman Sachs leader and lay off employees. This situation reminded Capelli of what happened in 1982 when IBM announced layoffs, causing other companies to follow suit and try to make do with less.
"Investors and pundits were saying if IBM is doing this, why aren't you?" Cappelli said.
One thing to ultimately keep in mind says Cappelli, is that companies can announce layoffs but not actually lay anyone off. Companies sometimes do this because they think it's what investors want to hear, but the company doesn't actually want to get significantly smaller.
"A lot of companies announce layoffs but never do them," he said. "The reason they do think is because they think it shows that they are serious and are doing something."